Erythroid differentiation of adult hematopoietic progenitor cells requires stimulation by erythropoietin (Epo), a hypoxia inducible cytokine that promotes erythroid progenitor cell survival, proliferation, differentiation and Hb production. Epo induces transcription factors that regulate globin gene expression such as the general erythroid factor GATA-1, the basic helix-loop-helix transcription factor, Tal1, and EKLF which is relatively specific for beta-globin expression. Differentiation of erythroid progenitor cells is characterized by an early induction of gamma-globin expression followed by induction of beta-globin expression that then surpasses by several fold gamma-globin expression. We find reduced oxygen tension decreases cell proliferation and erythroid differentiation, alters expression of GATA-1, SCL/Tal1 and EKLF that results in a delay in the induction of Epo receptor and beta-globin, and gives rise to an overall increase in the proportion of gamma-globin expression and fetal hemoglobin production. Nitric oxide also appears to increase the proportion of gamma-globin expression and fetal hemoglobin production. Conversely, we find that at normoxia increasing Epo levels appears to promote beta-globin expression without increasing gamma-globin expression or HbF production. Therefore, manipulation of Epo response by changes in the microenvironment or by direct manipulation of Epo receptor expression or Epo signaling may promote the early increase of gamma-globin and delay induction of beta-globin as a strategy to increase in fetal hemoglobin production.